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Some owners fear new rules could saturate markets, others see opportunities

The province’s plan to allow liquor sales in grocery stores is creating tension between owners of private liquor stores who see opportunities to move underperforming store licences and owners of more established stores who fear added competition in already saturated markets.

The government will create a limited number of new special licences allowing grocery stores to sell B.C. VQA wines. And while it won’t grant any new licenses for private liquor sales, it will lift the restriction on how far an owner can move the licence of an existing store, which would give grocery stores more flexibility to obtain licences.

Lifting that restriction was “disappointing” to Dave Crown, a director with the Alliance of Beverage Licensees B.C., which represents pubs, bars and private retail outlets and is one of two groups that speak for segments of the private store business.

“The reason that the moratorium (restricting the number of licences) is on is because we’ve already got way too much retail space in this province,” Crown argued.

Crown said private licensees opened outlets and ramped up operations in anticipation of former premier Gordon Campbell’s campaign to fully privatize B.C. liquor sales, which never happened.

He added that ABLE’s members worry that lifting the restriction will allow licenses to be bought in less-populated rural locations and moved to urban locations that are already saturated.

Previously, if a private-store owner wanted to move a licence, it could only be moved within a five-kilometre radius of its existing location.

“Every time you create more retail space but you don’t expand the market, it hurts people already in it,” Crown said.

However, there are early signs that grocery retailers are making plans to take advantage of the changes.

Ralph Mundel, senior director of marketing and communications for Thrifty Foods, said the 29-store chain is “well underway” with its efforts, but couldn’t reveal any details because too many regulations still need to be ironed out.

“I can’t even tell you whether it will be in all stores, because there are restrictive covenants on in a lot of the malls we operate in,” Mundel said.

The province also needs to write a specific definition of what constitutes a grocery store, said Stephen Harris, executive director of the B.C. Private Liquor Store Association.

Government won’t allow sales in convenience stores, but Harris said it isn’t clear whether retail chains such as Walmart, which has full grocery outlets in some stores, or London Drugs, which carries limited grocery offerings, will be considered grocery stores.

Harris also said lifting the restriction on re-location does give owners of struggling stores a chance to find better locations. He noted that liquor stores will still be restricted from locating within one kilometre from another liquor store, which helps.

Otherwise, “the market will quickly sort out where it makes sense to have a store and where it doesn’t make sense.”

“What the public will be concerned about is access and price,” Harris said. “Price probably isn’t going to change as a result of any of these rules and we’ve already got 1,400 different places to buy liquor in the province — and that will stay relatively constant.”

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